Strategic Information System Sample

1. Introduction

This report attempts to outline and elaborate upon the various aspects of strategic information in the form of various accounting packages that are used across business enterprises in Australia. The wide application and acceptance that strategic information systems have witnessed over the last few years has been one of the most unprecedented advancements in the business domain. This report deals with the role and quality of the various strategic information systems that are brought into the organizational structure for achieving various purposes that are ultimately targeted for greater efficiency and profitability of the organization.

The adoption of various information technology-based solutions for enabling various businesses has been growing over the years as more and more small, medium as well as large scale businesses have been feeling the pressure of building a more holistic and robust strategy planning (Badamas, 2014). The strategic information system that is in use in the case of the retail behemoth, Tesco operating in Australia, derives a huge deal of it from the information system available locally as it leads to a better outcome that is well targeted towards the local operations and keeps the cost factor associated in check.

Other than this, this report also focuses on the different challenges that are faced by the organization at various points of its business operations and how the use of the information system in the form of the accounting packages has been used to resolve the same. The issues that are identified in the context of the organization allow this report to draw upon the kind of system acquisition method to be adopted and how it would satisfy the current needs of the company (Badamas, 2014). To understand the same better, the entire business module of the enterprise with the details about its current business dealings has been enumerated as a part of the literature review.

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2. Literature review

In this literature review, the systems and the information technology standards that are being adopted by the retail chain Tesco, operating in Australia have been considered for the study. The application of the information system used by the retail giant is in the form of the accounting software package that it uses for its booking-keeping activities in the organization for maintaining records in the finance and accounting domain (Kietzmann, et al., 2013).

Firstly it is important to define the strategic information system and what it includes within its purview in terms of functional modules as well as roles that it needs to undertake once it is deployed in the organization. A strategic Information system can be defined as a class of software applications that exist as a result of the interaction between various smaller and functionally narrower modules that intend to satisfy business needs differently (Dong & Wu, 2015). The fact that such a system can serve as a reliable source for deriving strategically important insights for the growth and development of the organization is yet another requirement to be classified as a Strategic information system (Dong & Wu, 2015).

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2.1.Part A

Before going into the details regarding the application and deployment of the accounting package at the business enterprise, it is important to understand the organization structure and the business requirements. The structure of the organization, Tesco is largely independent of its subsidiaries operating in other countries. The monopoly that each of the outlets enjoys has led them to use the methods and technology that are best suited for certain market conditions and operational requirements. The company deals largely with a complex supply chain and users for the accounting software package where the participants include the suppliers, wholesalers, customers, accountants from the accounting and finance department, etc. Given the nature of the intended application, the organizational structure can be considered mostly horizontal with elements that would have slightly higher control over the data sets as compared to the rest (Meyer, Lubbe & Pelser, 2013). This would include the system managers and administrators who are responsible for the decision-making processes based on the data from the information system. Tesco deals with the retail and sales of different goods and commodities at the retail stores under Tesco Pty Ltd. The accounting package that is used in the organization serves the purpose of being used for the store front application such as billing and related functions for the sold and purchased items and the other includes internal applications such as payroll management, inventory and stock maintenance, and use of the sales and billing module specified for the suppliers and wholesalers (Morgan & Finnegan, 2014). Apart from this, the strategic information system would also enable the decision-makers of the retail chain to make effective decisions about the volume and scale of business endeavors that they should be pursuing based on the existing market trends (Skopik & Bleier, 2014).

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Several operational problems are inherent to this particular organizational structure. One of the key problems arises from the lack of data control from one functional business module to the other. For example, the payroll and accounting information to be available to other users in the entire system and what system privileges they would have is a concern (Skopik & Bleier, 2014). Other than this, the large size of the data and operations that are done on the data is also a major challenge. As the accounting and finance-related data of the organization is close to dynamic, the storage and scalability of the information system application is certainly a major concern on the part of the organization. Data inconsistency of similar data sets held by the different functional modules of the business is another tangible problem faced by the organization (Walsh, 2014).

Figure 1: Sales flowchart

On account of the above organizational structure and business needs of Tesco’s retail store, the system acquisition method would largely be dictated by the same. For commercial software to be effective in any business scenario, the scale and nature of operations are huge determinants. As in the case of Tesco, the sheer size and the scale of operations are not very conducive to the available commercial software packages or accounting. ERP would have been a preferable choice had the organizational structure been hierarchical (Leonard & Higson, 2014). Hence, the custom software for the accounting and finance application for the organization is preferable in this case. Custom-made accounting software packages would allow the organization to make necessary changes to the software to cater to the specific business challenges posed. This would also allow the organization to keep the application scalable for any additional future endeavors. Majorly, it would ensure a higher level of data security for sensitive financial and accounting data as compared to other system acquisition methodologies available.

There can be several control problems in the strategic information system in the form of accounting software packages. For instance, a lack of access to internal accounting records could be a challenge for the system developers to adjudge and test the efficacy of the strategic information system (Higgo, 2016). Other than this, the variation in the ground-level data can also lead to the discrepancy in the system studies undertaken previously. This makes the intended system more prone to fraud and other instances of data tampering that can cause both monetary and business loss to the organization. For the retail transactions that are undertaken at Tesco, there could be possible instances of fraud due to faulty pricing strategies for various products. Moreover, the internal accounting processes such as payroll management and other processes that serve as the input to the long-term decision-making and strategy planning on the part of the executive management of the organization need a high-end system that has the predictive built-in capability (Kietzmann, et al., 2013). Such systems are high on the data security and system security front but cannot undertake data-intensive, robust operations on the data sets. The cost and overheads caused by the deployment of the accounting package are certainly a challenge in the current situation.

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2.2.Part B

When it comes to the development and adoption of the strategic information system in the form of an accounting software package in the given preexisting organizational setup several considerations need to be made about the technical capabilities and the business requirements. Tradeoffs are an essential part of it to cater to the cost and time concerns involved in this regard. To deal with the issues of incompatibility and data inconsistency that might persist between the independent functional departments of the organization three kinds of IT solutions can be made available, namely the ERP (enterprise resource planning), EAI (Enterprise application integration), and finally, BPM which stands for Business process management. However since the acquisition of custom software is recommended in this context, Tesco should consider going on the lines of an EAI for the development and deployment rather than building the accounting software package from scratch. The business requirements and the scale and size of the retail undertakings by Tesco make sure that the data storage and overall usability of the software that is being bespoken is not compromised. Speaking of the current market size for customized accounting software packages, it is still in a very nascent stage at least in the context of Australia. This is because such custom-made software packages are often not very cost-effective for small and medium business enterprises. Various business enterprises tend to acquire commercially available systems or ERP systems in the form of mini ERP systems (Dong & Wu, 2015). The current market size is expected to grow at a higher rate as compared to the previous years because most businesses have been coming up with more specialized business requirements that cannot be implemented using any commercial software packages or information systems (Kietzmann, et al., 2013).

There are several market leaders in the accounting software development and deployment business. For instance, Xero has been known to make accounting software packages that are holistic and provide ample room for businesses of all scales and sizes to select the system that best caters to their needs. Xero has been able to create a niche for itself in accounting and finance software owing to the several commercial software packages that it has rolled out in the past. The diverse nature of the products that cater to the varied requirements of small and medium-sized businesses has been one of the competitive advantages that the brand has had in the past. But other than this, there are also several challenges in this regard, usually faced by the users. The rate of acceptance for such software packages even though has increased over the years, still leaves a lot of room for improvement (Gleasure, 2015). The users of such systems, especially the custom-made ones as in the case of Tesco, need to be trained to effectively use the system for improving their work efficiency and effectiveness.

Furthermore, in any kind of custom-made strategic information system deployed in the form of an accounting software package, there is always a chance for some or other kind of problem to arise as a result of bugs and other system deficiencies (Meyer, Lubbe & Pelser, 2013). However, to the advantage of the organization, the deficiency regarding compatibility and consistency can be easily bridged by the use of a customized accounting software package.

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3. Conclusion

In conclusion, it can be said that the literature review from the various sources has provided some insight into the existing norms and fundamentals in the strategic information systems and the information technology that the business enterprises and entities are adopting. A large part of the choice in the system that is to be deployed comes from the exact business requirement that needs to be fulfilled by the organization in the long run. Several limiting factors such as the scale of operation, the cost of development and deployment of the application software and other system upgradation requirements, and acceptance among the users and personnel in various departments play a huge role in the entire process. The application and deployment of such a system deliver certain tactical, strategic, and operational advantages to the organization in the long run.